Soldier Comes Home to Find Real Enemy Is Bank Taking His Home

By Kim Murphy, Los Angeles Times

11 August 11

On the same day Tim Collette welcomes his soldier son back for leave from Iraq, he loses his Oregon house to foreclosure. But unlike many homeowners, Collette is fighting back.

or months, since he knew his son Aaron would be coming home for two weeks' leave from Iraq, Tim Collette has been desperate to make sure there would be a home to come back to.

But on Tuesday, two things happened. First, a foreclosure auctioneer with a blue clipboard stood on the steps of the Deschutes County Courthouse, as Collette watched in silence a few steps below, and transferred the house back to the bank.

Two hours later, Collette waited in baggage claim at nearby Redmond Airport as a thin young man walked in, wearing Army camouflage, sandy suede boots, and then, a wide smile. A phalanx of grizzled military veterans waved flags.

That Collette would lose his house and celebrate a homecoming on the same day was dismal coincidence. But the 59-year-old kitchen-and-flooring contractor, who has become an expert at testifying before legislative committees, giving television interviews and mobilizing public ire at the banking industry, is determined that, unlike the thousands of foreclosure stories playing out in quiet misery across America, this one will not end quietly.

"Welcome home, son," Collette murmured.

While the rest of the nation kneeled under the recession, Oregon swan-dived. With the timber industry already long enfeebled, the new high-tech sector that had swept in powerfully in its place foundered too. By early 2009, the state's 10.8% unemployment rate was the third-worst in the nation, and Deschutes County's hit 12.6%.

New houses built in the pine-studded, high-desert former boom town of Bend suddenly stood empty. Single-family home prices declined 40% in two years, and Collette's work installing flooring and kitchen countertops evaporated.

Between 2009 and 2010, Oregon had the biggest increase in foreclosure starts in the country, averaging 96 a day.

Losing a home in Bend, Ore., it goes without saying, is no longer big news. But Collette, whose case is described by mortgage handler JP Morgan Chase as a simple situation of a homeowner who didn't make his house payments, has fought back. He has appealed to the state Legislature, won sympathy from a US senator and marshaled the aid of a Portland-based advocacy group, Economic Fairness Oregon, which has used his case to illustrate the banking labyrinths homeowners must sometimes negotiate to avoid having their homes seized.

Through it all has been the image of the young man coming home from Iraq, and the troubling question of what he would come home to.

By the time the neat two-story house on Boyd Court was foreclosed on Tuesday, more than 122,000 people across the country had signed an online petition on Change.org urging Collette's bank to give him a break, and an escort of two dozen military veterans on motorcycles showed up at the airport to provide a flag-waving escort for Aaron, a 20-year-old Army specialist stationed in Basra, back to the increasingly-famous house.

Through it all, Collette, who's got work again and insists he's ready to make full payments, has been polite and persistent. He's filled out forms to try to modify his mortgage, faxed over pay records and, except for two payments he says he missed at the bank's direction, deposited at least partial payments on his house every month without fail.

"I've been going over to the capital in Salem to testify for some bills to help people in foreclosure," said Collette. "I told them the biggest problem I have now is my son's coming home from Iraq.... He just wants to come home and sleep in his own bed and be safe for 15 days. And I told him I would make that happen."

JP Morgan Chase, which has been servicing Collette's mortgage (now held by the Federal National Mortgage Assn., or Fannie Mae) offered Collette a series of deals that would allow him to stay in the house at least until Aaron's leave is up - an option that falls short of what he ultimately wants, which is to keep his house.

"Mr. Collette's petition on Change.org asked for one thing, to retain his home through his son's leave, which ends in August. We have granted that request," said Chase spokesman Thomas Kelly.

But Fannie Mae denied the request for a modification of his loan terms, and when Collette in turn rejected Chase's offer to simply take over the house without the stain of a foreclosure, Kelly said it left the bank with no recourse but to call in the auctioneer.

"We offered him what he wanted, but now he's changing what he wants," he said.

Many of the people who hear Collette's story, and by now there have been a lot, are struck by how little he resembles the classic picture of the bubble buyers, those overly ambitious folks who splurged over their heads and hoped the market would cover the deficiencies in income.

"We're not flakes. We pay our bills, we didn't overspend," he told a state legislative committee this year.

Collette's pre-recession income in a town that only a few years ago couldn't build houses fast enough put the $375,000 price well within his means, especially after he put $125,000 down.

Only when the downturn dried up his work in 2008 did Collette ask if he could modify his loan. No, a Washington Mutual officer told him, he had never missed a payment; modifications were for people who were delinquent. He should come back when he had missed two payments.

"I went, OK, fine. I did that, and I applied for modification," he said. From then on, he continued making at least the partial payments suggested by the bank, he said, but they apparently weren't being applied toward his loan. Meanwhile, several loan modification requests were denied - most recently by Fannie Mae last week - and the bank notified Collette he would need to pay the $9,000 he was in arrears or lose the house.

That left Collette at the airport trying to figure out what to tell Aaron.

"I'm trying not to tell him all of it. All I want him to know is we're still in the house, and whatever else is going on, he doesn't need to worry about this. He needs to think about what he's doing over there," Collette said.

Aaron said he was proud to hear that his father was trying to save the house. "This has been my home for four years, but it feels more like home than any place I've ever been, and it's great to have it to come back to," he said.

"But I'm worried about my father - he's the most important thing in my life, and to have to worry that he's going to have to move in with somebody?"

Collette said not to worry, he isn't moving anywhere for the moment. Most likely, he said, he and the bank will end up in court, where he says he will be able to provide clear evidence that his home was taken without legal authority.

"You make the payments, you draw down your savings, you draw down your retirement, and by the time it's all over, you don't have any money left to fight them. People get tired. They hand over the keys and they go," he said. "I'm not going to do that."